Changes to Prop 13 - help or hinderance to commercial properties?

Bloomberg reports that Los Angeles Mayor, Antonio Villaraigosa has recommended revisions to California's Proposition 13 to increase property taxes on commercial properties.

I could write all day in response to this article and will probably post several posts over the next week. However, the first questions that came to my mind after hearing about the honorable mayor's suggestion was:

• Wouldn't this greatly increase costs of everything in California? and
• At this time, how many properties and tenant's are really going to be affected by a change like this?

But first, a little primer on Proposition 13 or also affectionately known as Prop 13, which I understand, similar laws have been passed in other states:

Prop 13 limits tax reassessments on any property in the state of California except when the property is transfered or a 2% annual increase when there is no transfer .  There are some exclusions.  For the most part, Prop 13 applies to both residential and commercial property.

My knee jerk conclusions are as follows, (knee jerk because I think that this really requires a lot more analysis):

1. It will increase spending and employment by counties due to the immediate need for qualified appraisers.  Of course there will be further increased costs due to a flood of appeals and problems with the appraisals because there will likely be a great shortage of qualified appraisers so the reassessments will probably be done in a hurry and by unqualified appraisers and "just because";

1. A significant increase in compensation for qualified appraisers, who will be hired by the smart and deep pocket commercial property owners, which higher paid appraisers will beet up on the lesser qualified, lower paid public employee appraisers, (this is meant as no disrespect to public employees, but the economics of the situation and shortage of qualified people will likely cause this disparity, at least on a temporary basis);
2. There will also be an increase in business for some tax lawyers and accountants;
3. Taxes will increase dramatically for commercial property owners, whose leases probably require, to a great extent, for the tax increase to be passed on to the tenant, who may be forced to go out of business, but first try to pass on the tax increase to their  customers and clients.

But then I asked, will the change suggested by Mayor Villaraigosa really have the immediate devastating effect on Californians, that I first thought?  Well, maybe no.

Commercial property values have dropped significantly over the past 2 years and during that time, many commercial landlords, who had purchased their properties at the higher assessed values should have been seeking lower assessments more in line with current market conditions.  This should be true, particularly for those landlords who pass on their tax liabillity to their tenants. So, for the shorter term landlords, a reassesment, probably will have little or no effect nor will there be an effect on their tenants.  The greatest effect will be on those landlords who have held onto their property, long term, and currently hold their property at lower assessed values, for tax purposes.  My guess is that these will be the smaller owners.